Question 1

Assuming price elasticity of demand is reported as an absolute value, a price elasticity of demand less than one indicates demand for the good is:

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unitary elastic. 
D)  unrelated to price. 
A)  elastic. 
B)  inelastic. 
C)  unitary elastic. 
D)  unrelated to price.

Question 2

The calculated price elasticity of demand:

Accepted Answer

A)  is always a negative number, although it is sometimes reported as an absolute value. 
B)  is sometimes negative and sometimes positive, depending on the magnitude of response. 
C)  is always a positive number, because price and quantity are directly related in terms of demand. 
D)  can be positive or negative, but is always reported as an absolute value. 
A)  is always a negative number, although it is sometimes reported as an absolute value. 
B)  is sometimes negative and sometimes positive, depending on the magnitude of response. 
C)  is always a positive number, because price and quantity are directly related in terms of demand. 
D)  can be positive or negative, but is always reported as an absolute value.

Question 3

Suppose when the price of movie tickets is $7.50, the quantity demanded is 550, and when the price is $8.50, the quantity demanded is 450. Using the mid-point method, the price elasticity of demand is:

Accepted Answer

A)  0.625 
B)  0.625. 
C)  1.6 
D)  1.6. 
A)  0.625 
B)  0.625. 
C)  1.6 
D)  1.6.

Question 4

The mid-point method of calculating price elasticity of demand:

Accepted Answer

A)  measures the percentage changes relative to a point midway between two points on a demand curve. 
B)  measures the absolute change relative to a point midway between two points on a demand curve. 
C)  measures the percentage change relative to a point midway between demand and supply. 
D)  None of these is true. 
A)  measures the percentage changes relative to a point midway between two points on a demand curve. 
B)  measures the absolute change relative to a point midway between two points on a demand curve. 
C)  measures the percentage change relative to a point midway between demand and supply. 
D)  None of these is true.

Question 5

Suppose quantity supplied increases from 16 to 24. Using the mid-point formula, the percentage change in quantity supplied is:

Accepted Answer

A)  40% 
B)  0.4% 
C)  4% 
D)  40%. 
A)  40% 
B)  0.4% 
C)  4% 
D)  40%.

Question 6

If the cross-price elasticity of two goods is 0.25, then we know that these goods are:

Accepted Answer

A)  substitutes because their cross-price elasticity is greater than zero. 
B)  complements because their cross-price elasticity is less than 1. 
C)  substitutes because their cross-price elasticity is less than 1. 
D)  complements because their cross-price elasticity is greater than zero. 
A)  substitutes because their cross-price elasticity is greater than zero. 
B)  complements because their cross-price elasticity is less than 1. 
C)  substitutes because their cross-price elasticity is less than 1. 
D)  complements because their cross-price elasticity is greater than zero.

Assuming price elasticity of demand is reported as an absolute value, a price elasticity of demand less than one indicates demand for the good is:

The calculated price elasticity of demand:

Suppose when the price of movie tickets is $7.50, the quantity demanded is 550, and when the price is $8.50, the quantity demanded is 450. Using the mid-point method, the price elasticity of demand is:

The mid-point method of calculating price elasticity of demand:

Suppose quantity supplied increases from 16 to 24. Using the mid-point formula, the percentage change in quantity supplied is:

If the cross-price elasticity of two goods is 0.25, then we know that these goods are:

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Exam 4: Elasticity

Assuming price elasticity of demand is reported as an absolute value, a price elasticity of demand less than one indicates demand for the good is:

The calculated price elasticity of demand:

Suppose when the price of movie tickets is $7.50, the quantity demanded is 550, and when the price is $8.50, the quantity demanded is 450. Using the mid-point method, the price elasticity of demand is:

The mid-point method of calculating price elasticity of demand:

Suppose quantity supplied increases from 16 to 24. Using the mid-point formula, the percentage change in quantity supplied is:

If the cross-price elasticity of two goods is 0.25, then we know that these goods are:

Economics and Life

Specialization and Exchange

Markets

Efficiency

Government Intervention

Measuring GDP

The Cost of Living

Unemployment and the Labor Market

Economic Growth

Aggregate Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

The Basics of Finance

Money and the Monetary System

Inflation

Financial Crisis

Open-Market Macroeconomics

Development Economics

Filters